Labor, coalition in tighter contest

Labor says the spectre of Tony Abbott becoming prime minister is causing voters to shift back towards the government.

The first Newspoll of the year put the coalition ahead on 51 per cent of the two-party vote - with its election-winning lead dipping from 54 per cent in the final poll of 2012.

Julia Gillard, who has returned from leave but is keeping a low profile, leads the holidaying opposition leader 45-33 as preferred prime minister.

Labor's primary vote is up six points since December at 38 per cent in the latest poll. That is 11 points above its worst result of 2012 and the party's strongest position since the 2010 election.

Newspoll chief Martin O'Shannessy said the figure mirrored the tightening in the two-party vote in the second half of last year.

"(It's) very clear that Labor's on the way back," Mr O'Shannessy told ABC radio on Tuesday.

"It will come down to who wins the campaign over the next eight months."

However, Mr O'Shannessy added that the coalition would have "no trouble" winning a workable majority if an election was held today.

Mr Abbott will make a return to the public spotlight with an address to the National Press Club in Canberra on January 31.

Ms Gillard will speak at the club the day before.

Defence Minister Stephen Smith said it was the "start of a political competition".

"You essentially see a range of polls which, while they have the coalition in front, have the government within striking distance," Mr Smith told reporters in Perth.

He said the polls reflected a lack of public confidence in Mr Abbott.

"When push comes to shove, the Australian community will form the view that Mr Abbott does not have the demeanour or the judgment to be prime minister of the country," Mr Smith said.

Fellow minister Craig Emerson warned against over-analysing the poll.

"We'd be having a different conversation in a fortnight as numbers move around," Dr Emerson said.

Shadow treasurer Joe Hockey said he expected the polls to "bounce around".

But he said much of what Ms Gillard had promised in the past six months was about keeping leadership rival Kevin Rudd at bay rather than running the country.

"Their problem is that in order to pay for all the big promises that Julia Gillard has committed to over the last few months, they are going to have to increase taxes and they are going to have to announce that sooner or later," Mr Hockey told Macquarie Radio.

Dr Emerson said the government was "making room in the budget" for all its promises, including extra funding for education and the national disability insurance scheme.

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